I got paid today. That in itself is nothing special, but what makes today special is that I am, for the first time in twenty years, under no pressure to pay down a student loan. Navient has sent me a couple more congratulatory emails, each with some helpful item, e.g., tax documents for when I file this year.
While I'm still in planning mode regarding my financial future, I now have the outlines of an initial strategy, and that strategy comes down to: save first, invest later. It makes no sense to start investing thousands of dollars if you don't have thousands of dollars in the bank. So the first priority is to save, save, save. I want to have $10,000 (US) in my American bank account before I even consider investing. I also want to have an emergency fund at the ready—one that equals four months' pay according to my current salary. That second goal is easy enough to achieve: when my current three-year contract finishes out, I'll be paid a "retirement" bonus that equals three months' pay (one month of pay for every year of the contract). That can go, as a lump sum, directly into the emergency fund. The $10,000 investment fund, meanwhile, can be built up over the coming months. If I dump $1500 a month into that, I can reach the $10K mark in seven months. I'll be ready to start investing by this coming summer, and by November, I'll have an emergency fund nicely set up in the mutual-fund section of my PNC Bank account. I can end 2021 feeling much more financially secure.
2 comments:
Sounds like a good plan. Once you are comfortable with your nest egg the risks associated with the stock markets will be easier to bear. My savings are all in money market accounts because I wanted easy access to the cash should I need it. Low interest rates though, so not much of a return. My big fears are inflation and a devaluing of the dollar.
Being debt free is the best feeling in the world! Agree with John on the biggest worries being inflation and devaluation of either the USD or KRW.
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